Growing Electricity Demand Drives the Demand for Power Boilers

Friday 13 January 2012, Amsterdam

The increasing demand for electricity in the Asia Pacific region is the major driver for the growth of power boiler market. Asia-Pacific countries, particularly China and India, have announced a number of projects aiming to establish new power plants in order to meet the growing demand for electricity. Coal-fired power plants occupy a major portion of these planned power projects. Although the increasing focus on clean energy sources is expected to have some impact on power generation from fossil fuels, thermal power is not going to loose its popularity anytime soon. The presence of abundant coal reserves, coupled with economical coal power generation technologies, is encouraging the commission of new coal-fired power plants. Power from clean technology will increase in the future but electricity generated from thermal sources will continue to dominate the generation mix. These factors, along with increasing power consumption, are expected to drive the demand for power boilers in the Asia-Pacific region. In 2010, the power boiler market in the Asia Pacific region generated sales of 171 units ($16628m in revenue). India and China were the two major contributors of revenue. India accounted for 69.8% of the total revenue whereas China contributed 17%. India’s exceptionally high revenue in 2010 was attributed to a contract signed between Shanghai Electric Corporation (SEC) and Reliance Power Ltd. involving the supply of 42 units of 660 MW power.

 
Retrofit Market to Drive the Power Boiler Market

With increasing awareness of environmental protection, individual countries across the Asia-Pacific region have enforced environmental targets and policies. governments are aiming to reduce Green House Gas (GHG) emissions and increase the percentage of electricity from clean energy sources in the power generation mix. In most countries across the globe, coal-fired power plants are the major pollutants which emit large amounts of GHG into the atmosphere. The policies and targets mandated by the governments are forcing the utility companies to reduce their emissions by using clean technologies for power generation. This has encouraged the boiler manufacturers to develop highly energy efficient boilers that emit less Carbon Dioxide (CO2). The utility companies are required to replace their traditional boilers with highly efficient new technology boilers. The presence of a large installed boiler base offers significant scope for the retrofit market across the Asia-Pacific region. The average life span of a boiler is 20-30 years, this offers abundant business opportunities through maintenance, servicing and upgrading of boilers.


Power Boiler - a Highly Competitive Market

The power boiler market in the Asia-Pacific region is highly competitive due to the presence of a large number of global and local players. The competition in the boiler market is influenced by price, energy efficiency, technology, distribution channels, performance, after-sales service, features and product capability. The market has two tiers of competition; the first consists of power equipment manufacturers, the second tier includes the niche players who participate exclusively as manufactures of boiler equipment. Multiple distribution structures are used in order to gain maximum market share. Distribution channels used include direct sales, Original Equipment Manufacturers (OEMs), distributors, value-added re-sellers, and others. The challenges faced by boiler manufacturers are the lack of product differentiation, the demand for low-priced high energy efficient boilers by the end-users and changing technology. The presence of a large number of vendors with a small customer base makes the market highly competitive.